Markets: FTSE 100 tumbles

17:00 - London markets recovered a little of their composure towards the end of the day although remained heavily in the red.

The FTSE 100 slipped 60 points to 5044 after earlier falling below the 5000 mark as judgement day for the banking sector rattled investors.

Royal Bank of Scotland (RBS) was the heaviest faller, down 7% while Lloyds (LLOY) rose to the top of the risers' board, up 3.5%.

Joshua Raymond of City Index says: 'Investors reacted positively to Lloyds, despite some earlier weakness, to its avoidance of the Asset Protection Scheme. The evasion of the APS has helped to save Lloyds a hefty sub charge for its protection and the £13.5 billion rights issue, whilst still large in its own right, has long been speculated about in the markets and has mostly been priced in already.

'RBS shares have been under pressure for sometime now and the fact that it could not avoid the APS, and will have to now pay a more expensive fee for its protection, along with the government increasing its grip on the bank have left shareholders disappointed,' he added.

16:51 - Gold prices hit a record high of $1,081.70 an ounce on Tuesday afternoon, boosted by a weak US dollar and IMF's plan to sell 200 tonnes of the precious metal to the Reserve Bank of India.

After a series of profit taking during the previous week which led to a softening in prices, the yellow metal surged this week to beat its last record of just over $1070 in mid-October.

16:45 - The US stock market remained mired in the red as investors grew nervous about Friday's US employment figures.

The Dow Jones suffered losses of 80 points taking it down to 9,709, while the Nasdaq was down 16 points to 2,033. The S&P 500 also dropped eight points to 1,035.

The Dow Jones's biggest winner was Caterpiller Inc. which rose over 1%, while the biggest fall of 3% was felt at Intel Corp.

16:30 - Swiss bank UBS' suffered a net loss of SFr 564 million (£334 million) during the third quarter - its fourth consecutive quarter of losses.

It blamed its heavy accounting charges of SFr 2.15 billion (£1.273 billion) for the fall following its restructuring programme. 

Despite this, UBS said its underlying profitability levels had improved on the previous quarter driven by better results in the investment bank's fixed income, currencies and commodities business.

The bank said the move of the Swiss government to exit its investment in UBS had a 'profound' impact on the company's confidence. After spending the last two quarters focusing on the bank's biggest problems, UBS said it was now steadily returning to normal and expects to enjoy further progress in 2010.

16:05 - Banking giant HSBC (HSBA) has announced plans to axe 1,700 jobs in the UK in its retail banking division.

The biggest cuts will come in its credit cards and collections division. However, the group added it would create 'several hundred' new roles in the coming year.

Yesterday Royal Bank of Scotland (RBS) announced it was cutting 3,700 jobs.

15:55 - Wealth management group St James's Place (STJ) beat expectations with a 3% rise in third-quarter sales.

Total new business reached £104.6 million, up from £101.9 million, while its total single investments rose 12% to £834.8 million.

David Bellamy, chief executive, said the group was 'pleased that we have returned to growth in the third quarter.' Funds under management exceeded £20 billion for the first time, helping to restore investor confidence, Bellamy added.

Shares dropped 2% to 255.20p during afternoon trading.

15:32 - The FTSE 100 started to claw back some of its earlier losses, but continued to remain very much in the red as the day wore on.

The mining and banking sector continued to weigh heavily on London's leading index pushing it down 57 points to 5047. Royal Bank of Scotland (RBS) was the heaviest faller, dropping over 11%, followed by the mining pack Fresnillo (FRES), Eurasian Natural Resources (ENRC) and Xstrata (XTA), who each shed between 3% and 4%.

John  Meyer, analyst at Fairfax, said: 'Miners are leading the FTSE lower despite strong copper and gold prices. It's profit taking and is driven by funds liquidation stocks to raise cash for the Lloyds issue.'

On the upside, Legal & General Group celebrated the biggest gain, rising over 2% following its third quarter results.

15:05 - Wall Street got off to a subdued start, in stark contrast to yesterday's rally.

The Dow Jones was down 17 points to 9772, while the Nasdaq fell 11 points to 2037. S&P 500 followed the trend, shedding two points to stand at 1041.

Du Pont and Walt Disney led the winners table, but their increases failed to offset greater losses seen at Intel Corp and Alcoa Inc.

14:45 - House prices continued on their uphill path for the fourth consecutive month in October, according to the latest survey from Halifax.

The value of the average property lifted 1.2% last month to £165,528 amid stronger demand, a low level of homes on the market and a pick-up in consumer confidence on the back of better economic news.

This is still 4.7% lower than in October last year although prices have steadily picked up in recent months.

14:30 - AIM-listed Intellego (IHP) saw its shares plummet almost 13% lower, on news that it suffered higher-than-expected losses in the first half of the year.

The eLearning and courseware solutions business said sales fell to £850,000 from £1.1 million in the first half of 2008, following a delay in the time taken to complete negotiations and sign larger orders. 

Angus Forrest, chairman of Intellego, commented: 'The first half was challenging but we have started the second half with several significant new contract wins and remain confident about the company's future prospects.'

Intellego's shares were down 0.075p to 0.53p.

13:55 - Construction sector activity shrank at a slightly higher rate for the second month running in October, according to the purchasing managers' index.

The total construction activity index stood at 46.2 in October, down from 46.7 in September and an 18-month high of 47.7 in August. This is still below the critical 50.0 level that indicates unchanged activity.

Howard Archer of IHS Global Insight says the sector, which accounts for 6% of the economy on the output side 'is still struggling appreciably and is highly unlikely to make a positive contribution to the economy's anticipated final return to growth in the fourth quarter.' 

13:33 - Oil powerhouses BP (BP) and China National Petroleum Corporation (CNPC) have signed a technical service contract with Iraq's state-owned South Oil Company for the expansion of the Rumaila oilfield.

The pair received the green light from the Iraqi cabinet in October to develop Iraq's largest oil field, after winning a 20-year contract to invest and develop Rumaila at the end of June. BP and CNPC, who own 38% and 37% respectively, plan to invest $15 billion to increase production to 2.85 million barrels of oil per day in the second half of the next decade.

For the full story, read: BP gets Iragi oil field green light

BP's share price lost almost 9p, settling at 576p.

13:05 - London markets were nursing heavy losses as banks and miners took a tumble.

The FTSE 100 plunged 94 points to 5011 - after earlier falling below the 5000 mark - with Royal Bank of Scotland (RBS) the biggest faller of the day after becoming the most bailed out bank in history. Xstrata (XTA) and Lonmin (LMI) were also struggling.  

12:45 - Shares in speciality pharmaceutical company Neuropharm (NPH) shot up 21% to 19.75p after announcing it is in discussions which may or may not lead to an offer being made.

Following discussions with shareholders, the AIM-listed loss-making company said it is seeking a sale or merger of the company so that the value of its drugs pipeline can be maximised.

It will provide a further update the shareholders at its AGM on 9 December.

12:20 - Gold prices rose above $1061 an ounce on Tuesday morning as a weaker doll boosted investor interest.

Market sentiment was also roused by positive housing and manufacturing data from the US, which suggested that the economis recovery is gathering pace.

The upward surge in price follows a week of sharp drops as investors took to the sidelines to assess the dollar movement.

11:55 - Copper mining company Antofagasta (ANTO) increased copper production by 3.4% in the third quarter due after ramping up production levels at its El Tesoro mine.
 
The company produced 109,000 tonnes during the three month period, compared to 106,300 in the second quarter, pushing the company's cumulative production in the first nine months of the year ahead of expectations at 328, 100 tonnes. 

However, production was still down compared with the same nine-month period in 2008 due to lower output at Los Pelambres, the company added. 

The company's share price lost 25p to 769p.

11:37 - Hardy Oil and Gas (HDY), an exploration and production company, has begun drilling on its exploration well KGV-D3-R1 on the company's D3 exploration licence.

The predominantly India-focused company has itself a target depth of 4,710 metres and is currently 1,964 metres deep, in its bid to uncover the hydrocarbon potential of various Miocene age sands.

This well is part of SmallCap Index-listed Hardy's ongoing exploration programme in the Krishna Godavari Basin on the East Coast of India, where it plans to drill a further three exploration wells before the close of 2010. 

Its shares were down 6% to 250p.

11:14 - The FTSE 100 (UKX) slumped further into the red as the day progressed, weighed down by the mining sector.

London's leading index was down 107 points to 4997. Xstrata (XTA) headed up the losses, after falling almost 5%, closely followed by Fresnillo (FRES). On the other side of the coin, Lloyds Banking Group (LLOY) led the morning's winners, with an increase of over 1%.

10:45 - Crude dipped below $78 a barrel on Tuesday morning ahead of figures expected to show an increase in US crude oil stock later in the week.

US crude fell to $77.34 a barrel, while London Brent was at $75.73 a barrel.

ODL Securities said in a note: 'Going forward the Fed statement on Wednesday and nonfarm payrolls data on Friday will likely to be the primary influence in the world markets offering guidance for the next direction in crude.'

10:25 - AIM-listed energy company Nighthawk Energy (HAWK) said its US Xenia pipeline was fully operational and flowing at more than 650,000 cubic feet of gas per day. 

US-focused Nighthawk, which owns a 50% stake in the pipeline, said gas was already being sold into the Southern Star Interstate transport line. 

Following the news, Nighthawk's share price rose just shy of 2% to 39.75p.

09:49 - Luxury engine maker Rolls-Royce Group (RR-) expects underlying revenues to grow this year, but warned that a 'sustained and general return to growth' was yet to be seen.

In a trading statement the manufacturer said trading activity across the group's operations remained consistent with expectations against challenging economic conditions and profits were set to be of a similar level to 2008. 

Rolls-Royce had been affected by delays in production of both the Airbus and Boeing, harming revenues from engine deliveries and leading to an inventory build up. 

The group's shares fell just over 12p to 439.40p.

09:15 - The government has unveiled long-awaited plans to invest billions more pounds in Royal Bank of Scotland (RBS) and Lloyds Banking Group (LLOY) and sell off large chunks of their assets in a major shake-up of the UK banking sector. 

RBS is set for a £25.5 billion injection while Lloyds will receive £5.7 billion. In turn, RBS will sell of 318 branches in the UK and Lloyds will have to sell at least 600 branches to meet the demands of the European Commission. 

Lloyds confirmed, however, that it will stay out of a government-led asset protection scheme but must raise £2.5 billion to do so. RBS, meanwhile, will join the scheme on revised and more expensive terms. 

For the full story, read: Major shake-up of RBS and Lloyds

08:48 - London markets got off to a weak start on Tuesday as investors digested the news of the banking sector revamp.
 
In contrast to yesterday's rally which saw miners surge ahead, the FTSE 100 dropped 60 points to 5045 with Xstrata (XTA) the heaviest faller.
 
In Asia, the stock markets were also subdued, despite improvement in US manufacturing rates, as concerns grew that US employment figures, due out on Friday, will continue to show the jobless rate is on the rise.
 
Hong Kong's Hang Seng headed up the losses with a drop of 380 points to 21, 240 while Japan's Nikkei lost 231 points to 9802.
 
Wall Street, in contrast, ended Monday on a high, after the Dow Jones rose 76 points to 9789, its fourth gain in ten days, buoyed by better-than-expected data from the US manufacturing and housing sectors.
 
News that the ISM Manufacturing Index for October came in at 55.7 and pending homes sales were on the rise for the eighth month in a row also boosted the Nasdaq, which gained four points taking its value to 2049, and S&P 500, which rose six points to 1042.
 
Investor sentiment was also buoyed by carmaker Ford's $1 billion profit and forecasts of a "solidly profitable" 2010.

Associated British Foods (ABF) enjoyed a 4% rise in adjusted pre-tax profit to £655 million for the year to 12 September amid stronger sugar sales and good growth from its Primark clothing chain.

Revenue rose 12% to £9.3 billion for the period with the group maintaining a cautiously optimistic outlook.

"The likely scale and speed of economic recovery remains uncertain, and we are cautious about the outlook for the UK consumer over the next year," the group said.

"However, we expect good revenue and operating profit growth with the benefit of returns from our recent long-term investments and restructuring together with improvement in our Chinese and US businesses."
It is paying a final dividend of 21p - up 4%.

Insurer Legal & General (LGEN) saw new business fall 5.4% in the third quarter with the housing market downturn hitting home insurance sales and a drop in employers buying annuities for staff.

Total new business sales for the three months ended 30 September was £312 million with a 7% drop over a nine month basis to £1.06 billion.

However, chief executive Tim Breedon retained a positive outlook. "Confidence is slowly returning to the economy. We see modest recovery in the UK going forward. The actions we have taken this year mean that our businesses are well placed to capitalize on future market growth and continue to deliver strong net cash generation," he said.

08:00 - The FTSE 100 (UKX) opens at 5104.5